the basics of edi and hipaa for clinicians, healthcare ...€“ tax id # created by mclure...

Created by McLure-Moynihan Inc.© 2001 MMI All rights reserved.

The Basics of EDI and HIPAA for Clinicians, Healthcare Executives and Trustees, Compliance Officers, Privacy Officers and Legal Counsel

Jim MoynihanMcLure-Moynihan Inc.

www.mmiec.com

For HIPAA Summit WestJune 20, 2001


• Introduction to HIPAA

•Primer on Electronic Commerce (EC)

•Primer on Financial EC

•Healthcare EC

•The HIPAA Transaction Sets


•HIPAA is a Compliance Initiative…

•…but the mindset of the regulators is different from “Fraud and Abuse”. Final enforcement rules are not finalized.

•HIPAA is an IT Initiative…

•…but while it shares features with Y2K it is both bigger and more beneficial.


•HIPAA is all about Standards!

•Standards for automating the business process of Claims Administration

•Standards for the security and confidentiality of Health Information


Mars Global Observer

RIP $125 Million


Administrative Simplification

• New England Journal of Medicine article claims 19-24% of US Healthcare Costs are Administrative.

• Private Sector Response - the Bush Administration and WEDI.


• To automate the claims process will require:

•Standards for key Employer-Health Plan data exchanges.•Standards for key Payer-Provider data exchanges.•Uniform Code Sets•National Identifiers

•Patient •Provider•Payer•Employer

1993 WEDI Recommendations


• National Guidelines to preempt state standards

•Signatures•Security

1993 WEDI Recommendations

• The Clinton Reform Initiative incorporated many of the WEDI recommendations with some embellishments.

•Support for Administrative Simplification survived the death of the Clinton Healthcare Reform Initiative


Privacy

• Bipartisan consensus on administrative simplification found its expression in HIPAA legislation of 1996. WEDI recommendations were incorporated with additional requirements related to Privacy.

The “leak” of the HIV Positive Diagnosis led to an alarmed public and a series of hearings on Privacy.


Organization DirectlyAffected

IndirectlyAffected

All qualified health plans, ERISA,Medicare, Medicaid üHealthcare clearinghouses üProviders üEmployers ü

Who Has to Comply?

“Covered Entity”


“Business Associate”

• Section 162-923• A covered entity may use a business associate,

including a healthcare clearinghouse, to conduct a transaction covered by this part. If a covered entity chooses to use a business associate to conduct all or part of a transaction on behalf of the covered entity, the covered entity must require the business associate to do the following:

– Comply with all applicable requirements of this part

– Require any agent or subcontractor to comply with all applicable requirements of this part.

Who Has to Comply?


What Kind of Provider Are You?

The Privacy Rule differentiates between providers:

•Direct Treatment

•Indirect Treatment

• “The health care provider delivers health care to the individual based on the orders of another health care provider; and..

The health care provider typically provides services or products, or reports the diagnosis or results associated with the health care, directly to another health care provider, who provides the services or products or reports to the individual.”


Monetary

PenaltyTerm of

Imprisonment Offense

$100 N/A Single violation of a provision

Up to$25,000

N/A Multiple violations of an identical requirement orprohibition made during a calendar year

Up to$50,000

Up to one year Wrongful disclosure of individually identifiablehealth information

Up to$100,000

Up to five years Wrongful disclosure of individually identifiablehealth information committed under falsepretenses

Up to$250,000

Up to 10 years Wrongful disclosure of individually identifiablehealth information committed under falsepretenses with intent to sell, transfer, or use forcommercial advantage, personal gain, ormalicious harm

Failure to implement transaction sets can result in fines up to $225,000 per year ($25,000 per requirement, times nine transactions)

Failure to implement privacy and security measures can result in jail time

Penalties


1996-2001 Waiting for Rules• NCVHS

– DHHS charged National Committee on Vital Health Statistics (NCVHS) to hold hearings on:

• Transaction Standards

• Code Sets

• Identifiers

• Final and Proposed Rules– Security Proposed Rule 8/98

– Privacy Proposed Rule 11/99

– Final Rule on Transaction Sets and Code Sets issued 8/00 effective 10/02

– Final Rule on Privacy issued April 14th, 2001, effective 2003.

Final Rules on Identifiers and Security expected mid-2001


National Identifiers

• Patient ID– No NCVHS recommendation

• Provider ID– HCFA-maintained Provider ID# recommended

• Payer ID/HealthPlan ID– HCFA-maintained database recommended. Requires

Funding (and release of final rule).

• Employer ID– Tax ID #


Security/Privacy

•Security rules deal with how data is stored and accessed.

•Privacy rules deal with how and to whom data is disclosed.


Security• “Protected Health Information”

– individually identifiable that has ever been:• electronically transmitted• electronically stored

• Administrative procedures---documented general practices for establishing and enforcing security policies

• Physical safeguards---documented processes for protecting physical computer systems, buildings, and so on

• Technical security services---processes that protect, control, and monitor access

• Technical security mechanisms---mechanisms for protecting information and restricting access to data transmitted over a network


A complete Internet communications A complete Internet communications implementation must include implementation must include adequate adequate encryptionencryption, employment of , employment of authentication authentication or identificationor identification of communications of communications partners, & a management scheme to partners, & a management scheme to incorporate incorporate effective password/key effective password/key management systemsmanagement systems..Acceptable Acceptable encryptionencryption hardware & software hardware & software approachesapproachesAcceptable Acceptable authentication/identificationauthentication/identificationapproachesapproaches

Security


Security• Authentication

• Did the sender of the message (user of the system) really send this message or was it sent by a “bad guy”.

• Encryption• Scrambling a message so that only the

sender and the receiver can “unscramble” the message using a Key.

• Public Key Infrastructure (PKI)• Use of public and private keys to encrypt

messages.


Are You In The “Chain of Trust”

• “a contract entered into by two business partners in which the partners agree to electronically exchange data and protect the integrity and confidentiality of the data exchanged.”


Security• First assign responsibility for HIPAA security

compliance.• Self assessment tool kits are available from

multiple sources.• “For the Record” published by NACI is an

excellent book that was a source book for the security proposed rule.

• Most people and literature overemphasize the technology and underemphasize the cultural and physical aspects of security.


Privacy• The Privacy Rule defines “protected health

information”, provides guidelines for disclosure of data and policies for authorized disclosure.

• Privacy guidelines are very controversial with over 60,000 comments from both sides of the debate.

• Final Privacy rules differed from Proposed Rules and administration and expense estimates vary widely.


Privacy• “The Privacy Advocate will be to the

Information Age what the Environmental Advocate was to the Industrial Age.”

• Providers have potential liability under common law and state statutes. HIPAA sets a floor, not a ceiling, and more stringent state laws preempt HIPAA.

• This is a people issue. How can management create a climate of confidentiality that can ensure patient trust? Attitudes matter – don’t make dismissive comments about privacy requirements.


Health Information• Health Information…Any information, whether

oral or recorded in any form or medium.

• Identifiable Health Information

Relates to the past, present, or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment for the provision of health care to an individual; and (i) that identifies the individual; or (ii) with respect to which there is a reasonable basis to believe the information can be used to identify the individual.”


Protected Health Information(§164.501):

•“means individually identifiable health information…that is:

•• (i) Transmitted by electronic media;

•• (ii) Maintained in any medium described in the definition of electronic media …[under HIPAA], or

•• (iii) Transmitted or maintained in any other form or medium.”


Key Requirements

•Consent

•Authorization

•Notice

•Right to Request Restriction

•Right of Access

•Right to Amend

•Right to an Accounting


Eliminating Paperwork

•A Decades-Old Quest– 1950s First Steps

– 1960s Tape-based standards

– 1970s Industry-Specific Standards

– 1980 Cross-Industry Standards

– 1990s EDI evolves into EC

– 2000s Stay Tuned!


What Took So Long?

•Primitive networks.•Lack of electronic format standards.•Expensive hardware and software.•Lack of consensus among trading partners.


The Local Area NetworkThe Local Area Network


?

The Wide Area Network

?

The Wide Area Network


Electronic Mail Boxes

Box 123

The Electronic Post Office

Electronic Mail Boxes

Box 123



... And Other Mail Boxes

Box 123

Box 456


... And Other Mail Boxes

Box 123

Box 456



•VANs offer store and forward mail box services.•Operated by GEIS, AT&T,MCI and others.•VANs support numerous communications interfaces, security, 24 hour support and an audit trail.

Value Added Networks


•A Public Packet Network that looks free!

•But there is no support, no security, no audit trail.

Despite shortcomings, the Internet and its protocols appear to be the dominant network of the future.

The Internet


Let’s Define Our Terms

• Electronic Data Interchange:– The exchange of computer-processable

data in a standardized format between two enterprises.

• Electronic Commerce:– Any use of a variety of technologies that

eliminate paper and substitute electronic alternatives for data collection and exchange. Options include Interactive Voice Response, Fax, Email, Imaging, Swipe Cards and multiple Web-based Internet tools.


EDI and EC: A Place for Both

• EDI– Standards-based data exchange - the foundation of

quality transaction processing.

– System to system exchanges of highly structureddata.

• Electronic Commerce:– Multiple ways to communicate unstructured data.

– People-to-system or people-to-people exchanges.


X12 Standards

“X12 Standards do not define the the method in which interchange partners should establish the required electronic media communication link, nor the hardware and translation software requirements to exchange EDI data.”

Source = HIPAA Implementation Guidelines


Is Getting Paid Important?

• Banks are involved with two HIPAA transactions, claims payments and premium payments.

• Banking industry networks are secure, widely used and as familiar as direct deposit of payroll and social security payments.

• Electronic Funds Transfer (EFT) is the transfer of value through the banking system.


… transfer value from payer to payee and provides the remittance information need to relieve the receivable account of the payee.

Trade Payments…


… are Trade Payments that • transfer value using EFT• exchange remittance

detail via EDI

EDI Payments…


•Fedwire•Automated Clearinghouse

Funds Transfer Systems


Fedwire

Originator’s Bank A

Beneficiary's Bank B

Federal Reserve System

Bank BBank A


Automated Clearing House

Originator’s Bank

Beneficiary's Bank

Federal Reserve System

Regional ACH

Regional ACH


•Fedwire•Immediate funds transfer.•Limited data carrying capability.•Expensive to send and receive.

Fedwire vs. ACH

•ACH

•Good funds arrive the day after payment origination.

•Extensive Data carrying capability in CTX.

•Inexpensive to send and receive.


835 Electronic Payment Order with remittance information

Originator’s Bank

Receiver’s Bank

Provider(Beneficiary)

$$Option 1: Dollars & Data Travel Together

Payer(Originator) 835 Electronic funds transfer

between banks which includes remittance information in an “electronic envelope”.


835 Electronic Payment Order with no remittance information

Originator’s Bank

Receiver’s Bank

Provider(Beneficiary)

835 Electronic remittance information sent through non-bank electronic network.

Option 2: Dollars & Data Travel Separately

Payer(Originator) VAN

Electronic Funds transfer between banks

$$Credit Advice


Eliminating Paperwork

•Format Standards

•EDI Management Software


What Standards?

• What is ANSI?– American National Standards Institute

– Since 1917 the only source of American National Standards

• What is ASC X12– Accredited Standards Committee X12, chartered in

1979

– Responsible for cross-industry standards for electronic documents

– Data Interchange Standards Association (X12 Secretariat) publishes annual upgrades through Washington Publishing Company.


We are used to standard forms.

We need to obtain information

from the equivalent of an electronic

standard form.


Standard Forms and Standard Formats


EDI Standard/Document

Standard Paper Forms=Transaction Sets

Invoice (810)Purchase Order (850)

Healthcare Claim (837)



Table 1 Header AreaTable 2 Detail AreaTable 3 Trailer Area



Formats Use Standard SegmentsSegments=Lines or Boxes on Forms

Name (N1)Address Information (N3)Reference Number (REF)Date/Time Reference (DTM)


EDI Standard/DocumentSegment

NM1*P2*1*Clinton*Hilary*R~

Segment ID

Segment Delimiter

Segment Terminator


EDI Standard/DocumentSegments are composed

of Data Elements

NM1*P2*1*Clinton*Hilary*R~

Individual Name

PersonInsured

Name, Last

Name, First

Middle Initial


How Does EDI Work?

Buyers Order Entry SystemSellers

Material Management

System

Mapping & Translation

to ANSI ASC

X12 “Standard”

“Electronic Mailbox”

Value-Added Network

Mapping & Translation

fromANSI ASC

X12 “Standard”

EDI is the computer-to-computer exchange of routine business information...

Field Name

PO Number Line Item No.Qty. Ordered Unit of Meas.Unit PriceBuyer’s P/NVendor’s P/NDelivery QtyDelivery Date

X12

BEG03PO101PO102PO103PO104PO107PO109SCH01SCH07

ST*850*0001^BEG*00*SA*XX-1234*19980301*AE123^PER*BD*EDSMITH*TE*800-123-4567^TAX*53247765*SP*CA*********9^FOB*PP*OR*DALLAS TX^ITD*01*3*5**10**30*******E^N1*ST*ABC EMPLOYER*9*123456789-0101^N2*CORPORATE DIVISION^N3*1000 TOON BLVD.^N4*AGOURA HILLS*CA 98898*US^PO1*1*25*EA*9.5*CT*MG*XYZ-1234^PID*F****HAMMER-CLAW^MEA*PD*WT*10*OZ^PO1*2*75*EA*6.95*CT*MG*L505-123^PID*F****PLIERS 8” – NEEDLE NOSE^MEA*PD*LN*8*IN^PO1*3*48*EA*3*CT*MG*R5656-2*BP*AB123-2^PID*F**** METEL RULER - MACHINIST^MEA*PD*LN*12*IN^FOB*CC*PL*TOON TOWN***SE*LOADING DOCK^SCH*24*EA*106*19980515^SCH*24*EA*106*19980615^CTT*3^AMT*TT*902.75*C^SE*23*0001


X12 Standards

X12 Standards establish standards for the “enveloping” of data for successful message routing.

EDI allows “trading partners to use the electronic equivalent of “return receipt mail” with a transaction set called the Functional Acknowledgement (997).



The outer envelopes are crucial to support of the Functional Acknowledgement (997) standard.

As will become apparent the 997 and message tracking are crucial for making HIPAA standards work.


EDI Management Software

• Translation• Trading Partner Profiles• Interchange Control• Mapping


Healthcare EDI/EC

•Medicare practices and procedures created today’s electronic claims processes.

•Claims clearinghouses arose to meet the mapping and editing needs of providers and commercial claims payers.

•Medicaid’s practices and procedures created today’s electronic eligibility processes.


Clearinghouse ClaimsPayer

PCMedical Group

Patient Accounting

System

FiscalIntermediary

HospitalPatient

AccountingSystem

DDE

Electronic Claims Processing

ClaimsPayer

ProviderPatient

AccountingSystem

X12 X12?


Transaction Set Standards

•Healthcare Claim or Encounter (837)•Enrollment and Disenrollment in a Health

Plan (834)•Eligibility for a Health Plan (270-271)•Claim Payment and Remittance Advice (835)•Premium Payments (820)•Healthcare Claim Status (276-277)•Referral Certification and Authorization (278)•Coordination of Benefits (837)•Later…•Healthcare Claim Attachment (275)•First Report of Injury (148)


Beyond Formats

• Data Element Standards– Existing groups such as NUBC, ADA, NUCC

continue to define data elements of a claim

• but…

• X12 and HHS determine data elements for claims status, eligibility, treatment authorization, remittance messages.

• Code Sets– HIPAA aims to standardize code set adoption.

– NCVHS endorsed “defacto” standards ICD-9 CM, CPT-4, HCPCS, CDT-2 and NDC code sets.


X12 Standards

HIPAA Implementation Guidelines, to be issued when updates to the standards are promulgated by DHHS, are the standard for purposes of HIPAA-compliance. They are subsets of the complete standard as approved by ANSI X12.

HIPAA standard transmissions must incorporate other X12 standards used for message management in order to function in commercial software.


Standard Transaction Sets

Major Goal for Human Resources:

Eliminate the errors and time-lags in benefit administration by revolutionizing enrollment and premium payment.

Requirements: Support for X12 Benefit Enrollment and Maintenance standard (834) and the Premium and other Payroll Deduction Payment (820).


Health Plan

Benefit Enrollment and Maintenance (834)

Payment/Remittance (820)

Bank

Human Resources

AccountsPayable

Treasury

MembershipAccounting

Bank Treasury

PremiumBilling

(820) (820)

Employer/

Plan Sponsor


Employers Achieve High ROI• AT&T

– Saved $15 million in first year of EDI enrollment.

• WEDI pilot in 1993

• Substantial decrease in claims paid to ineligible claimants

• Regents of the University of California– Implemented HIPAA compliant enrollment

– Found and corrected $1million billing error

• Pacific Business Group on Health/CALINX– Workgroup examined and adopted X12 standards as part

of CALINX initiative. CALPERS, UC System, SBC and others using HIPAA transactions.


Benefit Enrollment and Maintenance (834)

Human Resources

Vendor

Health PlanPPOs, etc.

Providers

Eligibility Inquiry and Response (270-271)

834 Benefit Enrollment and Maintenance


Enrollment Updates can be of two different types; Updates or Full File Audits

•Updates contain additions, changes and deletions. X12 developers recommend transmissions as often as daily but biweekely probably is preferable.

•Full File Audits are a complete list of all covered lives and related coverage details. These are often sent monthly or quarterly.



•Table 1, the header area, is simple. It contains the name and identification numbers of the Plan Sponsor, the Health Plan and possibly an intermediary broker or TPA.

•The Master Policy Number is also sent.




•Information in Table 2, detail section, includes the Subscriber name, address and ID #’s plus dates of coverage. Premium amounts can be sent.

•Dependent demographic data can also be sent including the name of the school attended by dependent.

•The HIPAA implementation Guideline only describes the standard’s use when passing healthcare coverage selections. The full standard is more robust.

•Primary Care Physician information and Coordination of Benefit data can also be passed.


See Handout!



Opportunities

The 834 is the standard of choice for the Human Resource Department, linking HR to all benefit administrators. Lower claims expense and improved customer service for employees and dependents are key benefits.

Related Risks

Mistakes in implementation may have an impact on many employees.



Steps for Implementing

•Determine if the source data comes from HR or Payroll systems or both.

•Determine if add, change and delete files can be obtained.

•Determine if current benefit plans and contract codes fit within HIPAA-compliant 834.

•Develop a Project Plan to use either internal EDI resources or outside service bureau.



820 Payroll Deducted and Other Group Premium Payment for Insurance Products

This transaction set can be used to:

• make a payment,

• send a remittance advice,

• or make a payment & send a remittance advice.

The 820 can be an order to a financial institution to make a payment to a payee. It can also be a remittance advice identifying the detail needed to perform cash application to the payee’s financial institution, or through a third party agent.


The Table 1 header area of the 820 is identical to the Table 1 of the 835 which we will cover later.

Table 1 contains the name of the payer and the payee and instructions to the bank about the movement of money.

820 Payroll Deducted and Other Group

Premium Payment for Insurance Products


In Table 2, the detail area, Remittance Detail Information can be delivered in two ways:

• a summary bill payment,

• or an individual or “list bill” payment.

Individual payments are of two types. The first type is a Payment made for each subscriber that includes amounts due for dependents.

The second Individual Payment type includes a payment amount for each subscriber and each dependent.




Opportunities

Automation of premium payments beings discipline and standardization to business practices.

Automated Health Premium Payments lay the groundwork for benefits that are paid through all premium deduction. The 820 can also be used for all EDI payments other than claims payments.

Related Risks

Errors in implementation can cause problems for many employees.




Considerations for implementing.

•Review contracted terms for premium calculation.

•Determine if output file is available.

•Consider in context of enrollment, invoicing and payment.

•Consider use of outside service bureau if there is no corporate EC/EDI department.

•Determine if financial EDI delivery is required by payees and review your bank’s capabilities.




Considerations for Broader Adoption of EDI

Payments

•Many hospitals can save up to .50% on much of what they buy through AP automation. Kaiser Permanente reduced AP staff by 1/3rd.

•Current check production processes are slow, costly and insecure. Kaiser reduced check costs by 30% through EDI and outsourcing.

•EDI payment applications for AP and payroll may be needed for HIPAA compliance with outgoing claims payments.

820 Payment Order/Remittance Advice


Provider Payer

Eligibility Inquiry (270)

Eligibility Response (271)

Certification Request (278)

Claim/Encounter (837)

Status Inquiry (276)

Status Response (277)

Payment/Remittance (835)

Certification Response (278)

Admitting

UtilizationReview

Billingand

Collections

Treasury

VerificationFunction

Bank Treasury

UtilizationReview

ClaimsProcessing

(835) (835)Bank

The Claims Process


Standard Transaction SetsProviders are not mandated to do business

electronically and can use clearinghouses if they chose to not support the standards.

The EDI standards offer varying degrees of “opportunity” and the providers should see:

• Lower bad debt writeoffs• Lower days in Accounts Receivable• Higher value added jobs in Patient

Accounting• Possibly fewer FTEs in the Business Office.


Standard Transaction SetsTargets “metrics” are crucial.

How many payers can you connect to for:Eligibility Transactions,EDI Claims,EDI Status Reports,Electronic Payments and Remittance Advices.

If you spend the money to automate where will the benefits accrue?



Major Goal for Patient Accounting:

Eliminate Eligibility Phone CallsExpand Eligibility to all inpatient and outpatient

services.Requirements: Support for X12 Eligibility

Standards (270-271).

Classic Business Process Improvement-Get things right at the beginning of the process!


270Eligibility, Coverage or Benefit Inquiry

Eligibility Transaction Processing is captured in the back and forth exchange of 270 and 271 Transactions.

The 271 can also be the capitation roster but that is not a HIPAA mandated transaction.

271Eligibility, Coverage or Benefit Information


270/271

These transaction sets can be sent in both a batch and real time mode.

Batch files are often sent in a “store and forward” mode with receipt of a response occurring in a separate communication session.

Real Time transactions occur with both and inquiry and a response occurring within the same communication session.


270Eligibility, Coverage or Benefit Inquiry

General Request Example

Submitter Type Payer/Plan Benefits Requested

All Provider Types All Medical/Surgical Benefits and Coverage Conditions

Categorical Request Example


Specific Provider Type All Benefits Pertinent to Provider Type

Specific Request Examples


Ambulatory Surgery Center Hernia Repair

DME Wheelchair Rental


Eligibility ManagementOpportunities

Stanford University reports that 50% of its bad debt was attributable to bad eligibility data.

NEHEN experience shows eligibility to be the best candidate for initial EDI implementation.

Related Risks

EDI Eligibility processing changes many jobs in patient accounting. Integration may not be supported by the underlying systems and procedures.


270/271 Eligibility Processing

Steps for Implementation

•Determine support for eligibility processing in your patient accounting/membership system.

•Determine timing of adoption by dominant trading partners in your market.

•Determine if you should use a vendor or build EDI functionality yourself.

•Review Vendor solutions/develop EDI plan.




Eliminate the “black hole” of lost claims by revolutionizing claims tracking.

Requirements: Support for X12 “enveloping standards” the claim standard (837) and the claim status standards (276-277).


837 Health Care Claim

This transaction set can be used to:

•submit health care claim billing information

•encounter information

•Or both

Providers of Health Care Services

Providers of Health Care Services

PayersDirectly

Intermediary Billers

&Claims

Clearinghouses


ProviderPatient

AccountingSystem

837

837 Information Flows

ClaimsPayer

997

277

Functional AcknowledgementInforms the sender that the transmission arrived. It can also send information about the syntactical quality of the 837

Unsolicited Claims StatusCan indicate which claims in the 837 batch passed front end edits and what additional information may be needed by Payer.

835

Claim Payment/Remittance AdvicePayer can send Electronic Remittance data either with an Electronic Funds Transfer or separately.


It can also be used to transmit health care claims and billing payment information between payers with different payment responsibilities where coordination of benefits is required or between payers and regulatory agencies to monitor the rendering, billing, and/or payment of health care services within a specific health care/insurance industry segment.



ProviderPatient

AccountingSystem

837

EDI Coordination of Benefits

ClaimsPayer #1

835

835Claims

Payer #2

837

ClaimsPayer #3

837

835


ProviderPatient

AccountingSystem

837

EDI Coordination of Benefits

ClaimsPayer #1

835

ClaimsPayer #2

ClaimsPayer #3

837

835

837

835



Opportunities

All providers will benefit from increased acceptance of EDI claims.

Sophisticated providers will be able to initiate direct sends more readily.

COB processing will be revolutionized… but not soon.

Related Risks

Loss of local code usage may have an impact for reimbursement from some payers (Medicaid).



Steps for Implementing/Planning

• Determine if your Patient Accounting System vendor is responsible ($$$) for your systems compliance with HIPAA.

• Determine if you have non-compliant local transmissions.

• Evaluate impact of local code usage and discuss with your trading partners

• Interview your claims clearinghouse about its HIPAA plan.


276/277Health Care Claim Status Request and Notification

The HIPAA Implementation Guidelines describe how Claims Status data can be exchanged in the 276 and 277 Transactions.

The Claims Status Response can be used without an related 276 preceding it. The 277 can be:

…a notification about health care claim status including front end acknowledgements and,

…a request for additional information about a health care claim by the payer.

These are important but non-HIPAA mandated uses of the Standard.


ProviderPatient

AccountingSystem

837

276/277

ClaimsPayer

277

276

Health Care Claims Status NotificationInforms the receiver that about the status of claims inquired about in a preceding 276.

Unsolicited Claims Status NotificationCan indicate which claims in the 837 batch passed front end edits and what additional information may be needed by Payer.

277

Health Care Claim Status InquiryRequests claims status information from payer.


276/277Health Care Claim Status Request and Notification

Payers may provide claims status reports from various points in the adjudication process.

•Pre-adjudication (accepted/rejected claim status)

•During adjudication (claims pended)

•Adjudicated but not yet paid claims.

The standard provides Claim Status Category Codes for “categories” of messages. These include A for acknowledged, E for errors, P for Pending F for finalized and R for requests.


276/277Health Care Claim Status Request and

Response

Business Issues

Many payers, particularly Medicaid agencies put claims status messages such as rejections on remittance advices. Payers have widely varying ability to support the standard. Providers should be aware of the payer business model and capability.

Providers must integrate status data into the accounts receivable process to automate claims tracking.


278Health Care Services Review Information

This transaction set can be used to transmit health care service information, such as:

•Subscriber

•Patient

•Demographic

•Diagnosis or Treatment Data for the purpose of request for:

•Review

•Certification

•Notification

•Reporting the outcome of a health care services review.


278 Health Care Services Review Information

Users of this transaction include:•Managed Care Payors•Providers•Utilization Review Firms

This transaction should not be used for Medical Management/Case Review


Opportunities

Authorization goes hand-in-glove with Eligibility.

Texas and Washington state hospital associations pushing for adoption of 278-based forms.

Related Risks

This standard has relatively little support among payers today. Don’t gear up to support the 278 until your trading partners commit.



Steps for Implementation

•Determine if your system can support 278 transaction processing.

•Determine if vendors can supplement system shortcomings.

•Determine if your trading partners will support 278 exchanges.

•Review the business process change for your UR staff.





Automate remittance and payment processing for claims payments from top 50 payers.

Requirements: Support for X12 Healthcare Claim Payment Standard (835).


835Health Care Claim Payment/Advice

This transaction set can be used to make a payment, send an Explanation of Benefits (EOB) remittance advice, or make a payment and send an EOB remittance advice only, from a health insurer to a health care provider either directly or via a financial institution.

One 835 describes one payment which may represent reimbursement for one or many claims.


835Health Care Claim Payment/Advice

Table 1 is used to notify or instruct trading partners about the routing of the money and the claims remittance detail. Table 1 information also serves as a replacement for all the financial documents used in making a payment.

This is more than “just a check” because we are dealing with the data and documents needed for both the originator (payer) and the beneficiary (provider).


Table 2 is used to provide information that allows the provider to identify post and close all accounts receivable related to the monetary payment being made. It is a replacement for one or many “Explanation of Benefit” or “Remittance Advice” statements.

835 Health Care Claim Payment/Advice


The 835 must balance at three different levels.

•At the Service Line level the Service Amount paid must equal the Service Amount submitted less adjustments.

•At the Claims Level the Claim Amount Paid must equal the Claim amount submitted less adjustments at the Claim Level plus Service Amounts Paid.

•At the Payment Level the Total Payment (BPR01) must equal the totals of all Claim Amounts Paid less any Provider Level Adjustment.

T

835Health Care Claim Payment/Advice Highlights


For Payers, sending a secure electronic 835 can be done for less than the cost of a stamp. Many payers print and collate checks and EOBs with the potential for sending EOB data to the wrong party.

For Providers receipt of the 835 provides the opportunity to automate posting and closing tasks. Automated secondary billing is also facilitated through receipt of ERA data.

Related Risks

Financial EDI is new to most payers.

Opportunities




Steps for Implementing

Determine if your Bank is EDI capable for both origination and receipt of EDI payments.

Determine if your AP or Claims System has the necessary fields to support financial EDI.

Determine How your Trading Partners want to do business.

Always involve the Treasury staff early.


Compliance Planning

• Create Team, Educate the Team and Strategize

• Perform High Level Assessment– Security

– Data Sets

– Transaction Standards

– Privacy

• Evaluate multiple options (in-house vs. outsource, build vs. buy etc)

• Develop Comprehensive Plan


The ChallengeChange Management

– Comprehensive Analysis of Current Procedures

• Comprehensive workflow analysis and data modeling to avoid major errors.

– Detailed Vision of Future State

• Best Practices must be understood in detail

• HIPAA Plan consistent with IS and Corporate Strategic Plans

– Step-by-Step Implementation Plan

– Appropriate Staffing and Funding


Where Are We Now?

• Claims Administration will move into the mainstream of Corporate Electronic Document Exchange.– ASC X12 and other standards bodies can help move the

industry to long sought goals of a “networked” healthcare industry.

• Providers and Payers will adopt improved Security practices to keep patient information confidential– Internet security guidelines will also allow the E-commerce

revolution to find applications in healthcare.

the basics of edi and hipaa for clinicians, healthcare ...€“ tax id # created by mclure...

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